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Finance and Public Administration Legislation Committee
Parliamentary Budget Office

Parliamentary Budget Office

CHAIR: We have before us the Parliamentary Budget Office. I welcome Mr Phil Bowen and officers of the Parliamentary Budget Office. Mr Bowen, you are particularly welcome. This is the first time you have appeared before this committee in your new capacity. I welcome you. Do you have an opening statement?

Mr Bowen : Thank you, Madam Chair, for your welcome. I should say that it is nice to be back—after almost six years, I think—in one of these committee hearings. I do have an opening statement. I attempted to make it brief, but I think I failed because there are quite a lot of things that I felt I should cover in my first statement to this committee. So, if you and members will bear with me, it will take me just a few minutes to make this statement.

As you are aware, the PBO commenced operations on 23 July of this year, the day that I took up my appointment as the inaugural Parliamentary Budget Officer. Following consultation with the JCPAA last week on 10 October, the PBO released its first work plan on 12 October, namely Friday. I understand that the work plan has been circulated to this committee, and it is posted on the PBO's website. The key priorities identified in the work plan are as follows: firstly, to place the PBO on a fully operational footing with the capacity to fulfil its mandate as a responsive and effective independent institution of the parliament and, secondly, to gain the trust of the parliament in the PBO as a valued source of budget and fiscal policy analyses and policy costings that strengthen the policy development process and enhance the transparency of the budget and fiscal policy.

As I have said in the foreword to the plan, the establishment of the PBO provides a new opportunity to help strengthen policy development and sharpen the focus of public debate on substantive policy issues rather than on the accuracy of policy costings. All senators and members of the House of Representatives have access to the services of the PBO. There is now a more level playing field from which members of parliament may, for the first time, obtain independent, non-partisan analyses of the budget and costings of policy proposals over the entire course of the three-year electoral cycle. The confidentiality provisions of the PBO's legislation allow the PBO, outside the caretaker period, to work interactively with the requestors of policy costings to ensure that the assumptions underlying the policies are properly understood and taken into account by the PBO in its costings. This approach has the potential to foster a more measured and robust approach to policy development and enhance budget transparency. The PBO is already open for business. We have been accepting requests for work since early September. To date, we have had 44 costing requests and we have completed two costings. Completion of the remaining requests is pending the receipt of information that we expect to receive shortly from other Commonwealth bodies. Because the PBO is still in the process of recruiting its staff and building its capability and databases, we have asked senators and members to be patient with us in the early stages of our operations. We will do our best to juggle the competing demands of building capacity and providing tangible outputs for our parliamentary stakeholders.

We have been active in consulting with our key parliamentary stakeholders and getting the message out about the role of the PBO and the services we can provide. We have a simple webpage on the Australian Parliament House site, which to date has received more than 5,000 hits. We have posted a number of documents, including the text of a briefing I gave recently to senators, members and parliamentary and departmental staff. As a further indication of the level of interest in the PBO, the briefing was over subscribed and I gave a second briefing to departmental staff a week or so later. In total, approximately 150 people, I am told, from within Parliament House attended the two briefings. I will also be giving a keynote address on the PBO to the CPA national congress next month in Canberra.

It is essential for the PBO to have access to a wide range of information for it to be able to undertake its work effectively. I am very pleased, therefore, to have concluded a memorandum of understanding with the heads of Commonwealth bodies in relation to the provision of information and documents. The MOU has a pro-disclosure bias and provides that heads of Commonwealth bodies should aim to provide sufficient relevant information to satisfy each request that the PBO makes. It also places strict confidentiality obligations on the Parliamentary Budget Officer and on the heads of Commonwealth bodies. The MOU was posted on the PBO's website on 10 October 2012. At that point, I think there were two signatures missing. Those signatures have now been appended to the document.

The confidentiality provisions of the MOU have been bolstered by recent actions taken by the government. The government issued protocols on 28 September 2012 which mandate that ministers and their staff will not ask heads of Commonwealth bodies for any information which would disclosure the nature of a confidential request from the Parliamentary Budget Officer. The government also introduced legislation into the House of Representatives on 10 October to amend the Freedom of Information Act so that information is not able to be released contrary to the intention of the PBO legislation.

The PBO currently has eight staff. Three are permanent staff, including myself, and five are temporary staff on secondment from Treasury and Finance. We are now in the process of recruiting our permanent staff and we expect to be at or near our full complement of approximately 30 to 35 staff by the end of the year or early next year. The PBO will adopt a relatively flat organisational structure around the following key functions: fiscal policy analysis, revenue analysis and program analysis. Responsibility for corporate strategy and services will be allocated to one of the PBO's senior executives in addition to his or her responsibilities for one of the core functional areas. Staff will work flexibly across the PBO in response to workload demands. The PBO's back office functions are being provided by the Department of Parliamentary Services under a shared services agreement.

Currently the PBO is housed in temporary accommodation in various locations within Parliament House. DPS has identified highly suitable permanent accommodation for the PBO in Parliament House. It provides a very cost-effective option compared with renting commercial office space and is self-contained and freely accessible and will be physically secure. It is expected to be available for occupation by the PBO by around the end of June 2013.

The PBO looks forward to working closely with senators and members and adding value to the policy development process. We are very happy to address any questions that the committee may have.

Senator RYAN: Welcome, and well done. I was ticking off a whole series of questions there with your opening statement. I can tell you have been here before. I would like to turn to a couple of issues that explore both the work plan that was made available on Friday, which—I will be honest—I have not had a chance to analyse at length. In your work plan you talk about taking suggestions from senators and members about some of the self-initiated work. Have you come to a conclusion yet on whether or when you might be undertaking some analysis of the Commonwealth's budgetary position? This is some of what I might call broader fiscal transparency work where you might look at budget assumptions or the long-term state of the Commonwealth budget, as some other parliamentary budget officers have undertaken elsewhere. I am thinking particularly of Canada.

Mr Bowen : I wanted to get the work plan out, if possible, before this hearing.

Senator RYAN: I appreciate that.

Mr Bowen : We would have liked to have done it earlier, but of course we could not because of consultations we had to undertake. But I am pleased that we at least managed to get it to you. It is a fairly short, focused document. You will notice in there that we do say that we will look at the underlying aspects of the budget, the key drivers et cetera. In terms of timing, at this point in time we really have to focus on getting our staff and our capability on board. At the same time, we are receiving quite a lot of requests for costing work which we have to address. This is quite understandable given where we are in the electoral cycle, with a general election due at the latest, I think, by 30 November. So we will give priority to requests from senators and members at this point in time, but I would be hopeful that we could allocate some resources to our self-initiated program. When we do, we will look at the sorts of issues that you have raised and that we have mentioned in the work plan this financial year.

Senator RYAN: I take your point about the requests from senators and members having some priority. There is also a general role, which is that leading into an election some transparency around the budgetary situation may also be of particular benefit, even if it is not a specific program that a senator or member has asked to be costed. So do you envisage being able to move onto the self-initiated work program before an election, if it was to be held on schedule in the second half of next year?

Mr Bowen : We do. It is under the section in the plan on allocation of resources, if I recall. We make it clear at section 3, 3.5:

The PBO will also allocate resources in 2012-13 to its self-initiated work program.

That is this financial year. We will certainly allocate resources to that program this financial year.

Senator RYAN: I am not sure whether the act precludes or provokes this, but I know that requests during the normal period of parliament can be made confidentially. Do you plan to report on the number of requests that are made and that you work on?

Mr Bowen : Yes.

Senator RYAN: Is that going to be an annual report sort of arrangement?

Mr Bowen : I did mention this morning that we have had 44 requests. I would envisage in our annual report that that will be one of the areas we report on. What we cannot do is report in such a way that we disclose the origin of confidential requests. That is not something we can do.

Senator RYAN: I appreciate that, and I appreciate that the reporting here is a bit more tricky that it would be normally. Have all those costing requests asked to remain confidential?

Mr Bowen : Yes.

Senator RYAN: All 44 requests, and that would include the two you have completed?

Mr Bowen : Yes.

Senator RYAN: When do you expect to have a full complement of staff? I appreciate some staff you might be willing to wait for because of their technical expertise rather than hastening to have everyone on board.

Mr Bowen : We have advertised recently for both the four Senior Executive Service positions and the sub-SES positions. Applications have closed for the SES. I think applications for the sub-SES close in a week or so. Arrangements are being made to progress the selection of staff within the next couple of weeks. I am hopeful that we could be at or near our full complement by around the end of the year, depending on the quality of the applications we get. That is why I have said 'or maybe early in the new year'. It is important to get numbers of people but it is also very important, as you allude to, to get the right people. We will not compromise on quality.

Senator RYAN: So we would we expect at the next estimates hearing in February that you would be fully into gear, so to speak.

Mr Bowen : We should be, and I certainly hope we will be.

Senator RYAN: Confidentiality of the requests that can be confidential, as you allude to, is critical. Have you developed any guidelines around what might happen to investigate an allegation of a breach of confidentiality? The reason I ask this is that, as you alluded to in your MOUs, it is more difficult to manage because you are requesting information from agencies, and a request written in a certain way may tip off what the project you are working on is. Do you have guidelines around investigations or allegations of breaches of confidentiality?

Mr Bowen : Let me answer this first of all by talking a little bit about how we are going about requesting information. In summary, we are not limiting ourselves to requesting information for particular costings. In other words, our requests go much more broadly than individual costing requirements might dictate. Secondly, where we do make a request for information to support a costing of a particular request, we do it in a way which does not identify the source of the request or the detail of the request. In that way, we are protecting the request. In terms of guidelines for dealing with breaches, essentially this will come under the established arrangements for dealing with breaches of the code of conduct. Whether it is a breach of the code of conduct by a public servant or by a Parliamentary Service employee, under both acts there are codes of conduct and fairly well-established arrangements for investigation under both of those codes. So we would use those.

Senator RYAN: You might, for example, receive a costing request on a policy that was of some sensitivity in public debate. You are often dealing with experts in the field, and a request for information could easily trigger off: 'I can guess what this information would be used for.' That would, I guess, not be an uncommon experience. Is it possible that you might—and I use this term carefully—free-ride off that request to make it a more general request for information, which you would then use for the rest of your work program in order to ensure that the specific nature of the request made by a senator or a member is sort of protected in a more general request that the Parliamentary Budget Office might make?

Mr Bowen : We may well.

Senator RYAN: Have you received any requests from parliamentary committees yet?

Mr Bowen : As a matter of fact, I received one on Friday, which was an invitation, more than a request, frankly. It was an invitation to make a submission to the committee that is inquiring into the FOI amendments that have been put into the House of Reps just recently. But that is the only one.

Senator RYAN: That is a unique one, because it sort of relates to your set-up. How would the process be for a committee to make a request? Let us say the Senate economics committee was having either a reference to inquire into something like superannuation, or there was a superannuation bill before the legislation committee. Does the committee pass a motion to request some work to be done by you or can it simply invite you to make a submission?

Mr Bowen : To be honest, I am not sure that I am the best person to answer that one. All I can say is: if we are requested, then, under the act, we will make a submission or appear before a committee. I do not think the lack of a request prevents us from making a submission either, for that matter. That is a hypothetical statement at this point, I might add. But, as to the mechanisms the committees use, I am not so privy to that.

Senator RYAN: One of the things you mentioned in the work plan was having a sort of a bank or a repository of information that the Parliamentary Budget Office staff can refer to so that not everything becomes a specific request of departments. Will you have access to the central budget management system under the arrangements with the department of finance?

Mr Bowen : I believe we will. At this point there is really nothing off limits, if I could put it that way. There are obviously there are privacy considerations, but I do not think that the central budget system falls into that category, no.

Senator RYAN: Particularly when it comes to costings for the budget, do you plan to build up a bank of information which would in the future it reduce your need to go back to Finance and Treasury for your own work plan—for example, maybe on fiscal outcomes or assumptions—and to have a bank of information within the Parliamentary Budget Office which allows to do that work without making requests?

Mr Bowen : We want to have a bank of data. We want to have appropriate economic and financial models which we can use, some of which will have their genesis in other government agencies. We also want to have the capacity for our data and our models to be updated on a regular basis. All of that is to put us into the situation you are talking about so that—though we will never be completely self-contained—we will be as well prepared as we can be to address costing requests quickly. To do that, we have to have our own data.

Senator RYAN: That goes to my next question. Part of your work plan will be the overall fiscal situation of the Commonwealth and the budget. How regularly would you see this information being updated? Annually? Post-budget? With the budget and MYEFO? How will you ensure that you are not a couple of steps behind, through no fault of your own, in terms of assumptions which might be made and which could significantly change the Commonwealth budget situation and therefore your advice to senators and members?

Mr Bowen : We will endeavour—and I think we are required—to use the latest available budget parameters. So, whenever there is a budget update, we will need to have the parameters coming out of that update.

Senator RYAN: Upon their release or prior, to facilitate your work?

Mr Bowen : That is a detail that I have not sorted out. But certainly we would have to have immediate access to that information.

Senator RYAN: So, at the very least, upon release it would be immediate access?

Mr Bowen : At the very least, yes.

Senator RYAN: Could we safely assume that you would hope to have that upon every budget update: budget and MYEFO in a regular year and, potentially, PEFO in an election year?

Mr Bowen : Every update, yes.

Senator CORMANN: You mentioned that you expected to have all your stuff in place by the end of this year or early next year. In your priorities for 2012-13, the key priority is to 'place the Parliamentary Budget Office on a fully operational footing with the capacity to fulfil its mandate as a responsive and effective independent institution of the parliament'. By when you expect the Parliamentary Budget Office to be fully operational?

Mr Bowen : We are now operational—we are responding to requests—but I could not say we are fully operational. One element in becoming fully operational is to have our full complement of staff and to have the right staff; another is to have the models, the databases et cetera. I am reasonably confident that by very early next year we should be in that sort of position.

Senator CORMANN: Beyond the MoUs and the staff and the access to the models and so on, is there anything that is outside your control and that would prevent you from being fully operational?

Mr Bowen : Nothing that I can think of immediately, but—

Senator CORMANN: What if the FOI legislation is not passed in a timely fashion? How will that impact on your capacity to be fully operational?

Mr Bowen : On the FOI legislation, the government has certainly taken the view, no doubt on advice, that to ensure that the spirit of the PBO legislation is complied with that this additional legislation is necessary. Of course the PBO itself is exempt. To the extent that information is our information and it is information that we have been asked to hold confidential then we can do that. We can keep it confidential. The MOU with other government bodies and the protocols go a long way to shoring up that confidentiality, and the way we will operate within that will help. I do not necessarily see the FOI amendment as being something that would prevent us from working. It is not at the moment. I hope it does not in the future. That aside, anything further I say is probably rather speculative.

Senator CORMANN: Sure. But going back to the whole question on when you are likely to be fully operational, I guess that is in the context of leading into an election. What would be the earliest that the Parliamentary Budget Office would be fully equipped and fully operational to the standard that is appropriate in the context of providing services to various parties in the context of a pre-election period?

Mr Bowen : I will go back to my earlier statement. I am certainly working towards hopefully being in that position early in the new year. What is different now with the PBO in place is that members, senators and political parties can use us in a more measured way in the lead-up to an election. Previously under the Charter of Budget Honesty Act, which I think was a major step forward in terms of budget transparency, there was really only an opportunity to have policies costed over that four to six weeks of the caretaker period. For the rest of the electoral cycle, there was no opportunity to do that. So hopefully we can work effectively with members, senators and political parties to help them have their policies costed on a confidential basis, if that is what they wish, in the lead-up to the election period so that when policies are announced and then made public and costed during the caretaker period we should not get the differences in costings that we have—

Senator CORMANN: Sure, but there is obviously some uncertainty around the timing of the election.

Mr Bowen : There is.

Senator CORMANN: There will likely be some peak periods of demand. You are not even fully operational at this point in time, yet you have already received 44 requests. In the context of the lead-up to an election and in the context of a peak period, how will you prioritise requests coming in, given that you have limited resources within which to do your job? How will you appropriately prioritise the requests that are coming in?

Mr Bowen : Let me make one other comment. In addition to the staffing of the PBO—the permanent staffing—we do have funding to call on specialist external resources from time to time. I believe that in the lead-up to an election, in the forward estimates there is additional funding to assist us to bring on more temporary staff or bring in external resources to help. That will be one way that we will deal with a surge in demand. In terms of setting priorities, this is a very difficult area, and I am the first to acknowledge this. What I can say is that we cannot refuse to take requests, and we will not. But if political parties can organise themselves to coordinate their own requests to us, then in a sense they can help set the priorities for us, and that would be a very helpful thing to do.

Senator CORMANN: Sure, but you are assuming that everyone is going to approach this with the same level of goodwill. Let us say a minor party in the parliament—I shall not name anyone—ends up being particularly enthusiastic about putting in high levels of requests, and the coalition, which is approaching it in a coordinated fashion, has a smaller number of requests, but the system ends up getting clogged, how do you deal with that sort of conflict in that scenario?

Mr Bowen : Clearly that would not be an acceptable scenario.

Senator CORMANN: But how would you deal with it?

Mr Bowen : I think the first thing we would do is sit down with the parties concerned and talk through the issues to come to an acceptable arrangement that we could all live with and manage.

Senator CORMANN: Are there any limits to how many requests individual senators or specific parties are able to submit?

Mr Bowen : No, not under the legislation.

Senator CORMANN: How will the PBO make sure that the level of data provided by Commonwealth agencies for costing and other work is sufficiently disaggregated and unadjusted, like raw data, so that you can make your own objective adjustments to assumptions, conclusions et cetera?

Mr Bowen : There are two things about that. We currently have—and we will have—expert staff who are very experienced in doing just this. Secondly, there will be data—for example, excise and tax data—that we will not be able to disaggregate right down to raw data, for obvious privacy reasons. That said, even a small sample of tax data, for example, can be statistically significant for our use.

Senator CORMANN: Let me ask you a very specific question, because we have had a debate in this parliament over the last two years about the credibility or otherwise of mining tax revenue estimates that have been put forward by the government. The government has argued that they cannot publicly release the underlying revenue assumptions, commodity price assumptions, production volume assumptions and so on because supposedly they are commercial-in-confidence with the three companies that signed onto the mining tax deal with the government. Will you have access to that sort of data, which the government has not been prepared to release publicly, and will you be able to make judgements as to whether, in your view, the commodity price assumptions used are credible or not? Will you come up with alternative conclusions in terms of what might be a more reasonable, more credible expectation around mining tax revenue estimates than what might be in the budget?

Mr Bowen : I think when it comes to confidentiality we will not be differently placed to others.

Senator CORMANN: So you will not get access to that data from Treasury?

Mr Bowen : I did not say that. What I said was: when it comes to confidentiality provisions, if that has precluded public release—and this is hypothetical at this point—

Senator CORMANN: It is not hypothetical; it is very specific. I hear where you are going. You are going to say that if Treasury cannot release underlying assumptions they have used then you will not be able to release them either. The question I am asking is different. Will you have access to the information around revenue assumptions that has not been publicly released, be able to make a value judgement as to whether or not, in your objective judgement, the assumptions used are credible and then essentially feed any revised assumptions into the model and come up with different conclusions potentially? While you might not be able to release the underlying data, would you be able to release your assessment of a more realistic set of outcomes?

Mr Bowen : Yes. I think there is nothing to preclude us—in fact, I think we must—using the best and the latest information we can get. If that means that that is different information from that which was used previously, then so be it—I think we have to do that.

Senator CORMANN: I guess the question ultimately is to what extent you will be channelled or constrained by the assumptions used by individual Commonwealth agencies or to what extent you might be able to have access to the spread of potential assumptions and make a judgement as to which assumption is the most reasonable to pick in a particularly set of circumstances.

Mr Bowen : Senator, the way I read my act is that the PBO will use the same costing methodologies as have been adopted by Treasury and Finance, but that does not mean that all of our assumptions will be identical. At the end of the day, the PBO's costing is the PBO's costing and we may in fact not simply produce point costings but do sensitivity testing about certain assumptions as well, just to give a better guide as to how the costings would move, particularly if some of the assumptions are particularly difficult assumptions to make.

Senator CORMANN: I am talking not about hypothetical things; I am talking about things which have happened in the past where the parliament has been hampered in its capacity to get to the bottom of fiscal implications of certain decisions. So the government changed from the resource superprofits tax to the minerals resource rent tax. The fiscal impact, supposedly, was minimal, even though there were significant concessions on the back of a massive increase in expected commodity prices moving forward, which now we see has not eventuated that way. Would you be in a position to make an alternative judgements on the creditability or otherwise of theses sorts of decisions within government?

Mr Bowen : One thing it is important to recognise is that costings have lives, that costing at a point in time may well be the best costing that can be done, but if you do it six months later, because of all the changes in the world economy and other factors, you may well get a very different costing. So that is my answer. We cannot assume—

Senator CORMANN: So you will just go along with what Treasury is saying?

Mr Bowen : No, I am sorry, I did not say that. I said if we do a costing at a different point in time the assumptions may well be quite different, which means—

Senator CORMANN: But there is nothing that prevents you from looking. If there is a dramatic shift in assumptions used by government—

Mr Bowen : That is what I am saying.

Senator CORMANN: and you take the view that that is not really justified, then you might come up with a different conclusion.

Mr Bowen : We may, but at the end of the day I want to make it clear that while we will use consistent methodology, a costing that we put out will be a PBO costing and we will have to take responsibility for that.

Senator CORMANN: Thank you.

Senator RYAN: With respect to the methodology that you were talking to Senator Cormann about, one of the issues we have discussed before with Finance has been the use of second-round effects in budget costings or the costings for particular programs. This is something that is used more often in America—I think it is called, in an economic sense, 'dynamic scoring' over there. If, for example, you were to be asked to cost a policy or to cost an alternative to a government announced policy that did not, but let us say that the Treasury had included those second-round effects and it was those second-round effects that were being challenged by the senator or member who had sought to have your office undertake some work, do you consider that to be something that is methodology, such that you use the Treasury or Finance methodology, or something that you can include in a sensitivity analysis, or something for which you can provide feedback to the senator or member upon its likelihood of eventuating?

Mr Bowen : As I have said, we are bound under the act to use the methodologies adopted by the secretaries of Treasury and Finance, unless we develop our own methodologies and then have them agreed with Treasury and Finance, so—

Senator RYAN: Can I interpose there a quick question. Are the secretaries of Treasury and Finance protected from any discussions with the minister in their discussions with you about seeking such an agreement? Or is that protected under the directions that I know various people have been given? So, if you go back to challenge a methodology and you need the agreement of the Secretary of the Treasury, is that a discussion only between the two of you or is there a third party that is going to be indirectly consulted?

Mr Bowen : Maybe that is a question for the secretaries of Treasury and Finance rather than me.

Senator RYAN: Sure. But it is not something that you would consider to be a protected discussion in that sense?

Mr Bowen : From my memory, it is not explicitly addressed in the memorandum of understanding that I have with them, and that is why I say I think that is something that you would have to discuss with them.

Senator RYAN: Sure. Sorry, I did not mean to interrupt; I just wanted to—

Mr Bowen : That is okay. This has always been a fairly difficult area, I think. Currently we are working and we are using the Charter of Budget Honesty Policy Costing Guidelines that were amended and put out in 2012, earlier this year, so, unless we were to develop our own, as I said, in consultation—in fact, in agreement, I think it is—with the two secretaries, this is the document that we have to use. This document is quite explicit on second-round effects. It does acknowledge that there have been some occasions where second-round effects have been used. This was for quite broadly based packages. I think in the 2005 Welfare to Work package, for example, which was expected to have a big impact across the economy, some second-round effects were taken into account, but otherwise that is not normally the case.

Senator RYAN: Finally, if at some point your office were to be swamped with more requests than it could handle in a given year, which I expect to be not too far into the future—and you do have your own work program that you wish to undertake—how would you be internally allocating your resources? Would it at least in some way reflect potentially the composition of the parliament? For example, if you spent 60 or 80 per cent of your resources costing requests from one group of the parliament that might have a dozen members, as opposed to either government backbenchers or, more likely, members of the opposition, that might provoke a few questions. How will you make those decisions?

Mr Bowen : The simple answer for me, I think—this is not a simple issue—is first of all to consult with the people who are using our services and take it to them. It will be our problem, but share the problem in a sense and try to find a shared solution. I do not have a better answer than that at this point, but that would certainly be the starting point for me.

Senator CORMANN: You seem to downplay the importance of the FOI legislation being passed, yet the government is on record as saying that the FOI legislation being passed is critical to the operation of the Parliamentary Budget Office. Can you explain that divergence of views to us?

Mr Bowen : I have not downplayed it. If I gave that impression that is not correct. I am not downplaying it. What I am simply saying is that the PBO will continue to operate as we have been before the amendment was passed.

Senator CORMANN: Can it be fully operational in the lead-up to an election without that amendment being passed?

Mr Bowen : Whether the amendment is passed or not is really not a matter for me. I have not been involved in that amendment in detail. But whatever happens to that amendment we will press ahead to become fully operational, to address requests and to keep requests and our work confidential where we are asked to do so. Whatever happens with the FOI legislation we will continue to build our capability to become what I call fully operational.

Senator CORMANN: But if the lack of passage of the FOI amendment makes government agencies less prepared to cooperate fully with you it will make you less effective than you otherwise could or would be in the context of providing proper costings in the lead-up to an election.

Mr Bowen : I see. Under the memorandum of understanding that I have—when you read it you will see that it has a very, very strong pro-disclosure bias. Of course, we will have to look at requests and responses on a case-by-case basis, but the spirit of the letter and the spirit of that MOU require Commonwealth bodies to do their utmost to provide the information. That has been written, it has been signed up to by all portfolio secretaries, by the head of the Taxation Office, the head of the bureau of Customs, whatever they are these days—the Customs organisation—the Bureau of Statistics et cetera. They have all signed that, before the FOI legislation has been passed. Their obligation under the MOU is to do their utmost to provide me with the information that I seek from them. Moreover, if for any reason they feel they cannot provide that information the first thing they have to do is work with the secretaries of Finance and Treasury to see if there is some other way that the information can be provided to the PBO and, finally, for information that is not provided they have to give me a statement in writing with the reasons for which they have withheld information. If there were to be a systemic problem—I am not anticipating this—then clearly we would have to address that in some systemic way. But, at this stage, there is an obligation on Commonwealth bodies to provide information to the PBO to the maximum extent possible.

CHAIR: Thank you, Mr Bowen, to you and your officers for making yourselves available. We look forward to seeing you again in February.